MicroStrategy Earnings Preview

Investors never know what to expect for MicroStrategy (NAS: MSTR) , as it has wavered between topping and missing analysts estimates during the past fiscal year. The company will unveil its latest earnings on Monday, August 1. MicroStrategy is a provider of business intelligence software that enables companies to report, analyze and monitor the data stored across their enterprise to reveal the trends and insights needed to make better business decisions.

What analysts say:

Buy, sell, or hold?: Analysts don't like MicroStrategy as much as competitor Pegasystems overall. Three out of seven analysts rate Pegasystems a buy compared to two of seven for MicroStrategy.

Revenue Forecasts: On average, analysts predict $130.1 million in revenue this quarter. That would represent a rise of 21% from the year-ago quarter.

Wall Street Earnings Expectations: The average analyst estimate is earnings of 57 cents per share. Estimates range from 33 cents to 72 cents.

What our community says: CAPS All Stars are solidly backing the stock with 85.5% granting it an "outperform" rating. The community at large backs the All Stars with 85.8% giving it a rating of "outperform." Fools have embraced MicroStrategy, though the message boards have been quiet lately with only 73 posts in the past 30 days. Despite the majority sentiment in favor of MicroStrategy, the stock has a middling CAPS rating of three out of five stars.

Management: MicroStrategy's income has fallen year over year by an average of 36.3%. The company's gross margin shrank by four percentage points in the last quarter. Revenue rose 30.7% while cost of sales rose 53.4% to $33.2 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

72.8%

76.4%

76.2%

77.4%

Operating Margin

0.9%

13.6%

8.6%

13.3%

Net Margin

0.9%

12.9%

6.4%

10.8%

One final thing: If you want to keep tabs on MicroStrategy movements, and for more analysis on the company, make sure you add it to your Watchlist.